Coal and the Environment. Milton Catelin Chief Executive

Transcription

1 Coal and the Environment Milton Catelin Chief Executive 3 rd Symposium on Gondwana Coals Porto Alegre, Brazil 2008 Coal Market Strategies Conference September October 2008

2 World Coal Institute WCI provides a voice for coal Coal provides 25% of world primary energy 40% of world electricity 66% of world steel 2 American Coal Ash Association American Coal Council Assocarboni (Italy) Associacao Brasileira do Carvao Mineral Association of UK Coal Importers Australian Coal Association British Equipment Manufacturers Association Camara Asomineros Coal Association of Canada Coal Association of New Zealand Confederation of UK Coal Producers German Hard Coal association Indonesian Coal Mining Association Iranian Mines and Mining Industries Japan Coal Energy Center National Mining Association (USA) Philippine Chamber of Coal Mines Shaanxi Coal Industry Bureau Svenska Kilinstituten UCG Partnership PT Adaro Indonesia Anglo Coal Arch Coal BHP Billiton Energy Coal BHP Billiton Mitsubishi Alliance Carbonnes del Cerrejon Colombia Coal India Limited Consol Energy Glencore International Joy Global Mitsubishi Development Peabody Energy Rio Tinto Limited Solid Energy NZ Store Norsk Spitsbergen Grupekompant Norway TOTAL SA XSTRATA Coal

3 Coal s competitive advantages Coal Lasts 133 Years More than twice as long as gas (60 years) More than three times as long as oil (41 years) Abundant Globally distributed Affordable & stable in price Safe & reliable 3

4 Power plant efficiencies Replace: < 300 MW > 25 years old >300 MW Supply side efficiency is important 1% increase LHV efficiency = 2 3% points decrease in CO 2 emissions Reduces 1.7 GtCO 2 / yr 22% coal emissions 5.5% global emissions and an essential prerequisite for CCS 4 IEA 2008

5 IPCC Special Report on Carbon Capture & Storage Carbon capture and storage CCS could deliver up to 55% of the mitigation effort to 2100 Costs of stabilising CO 2 emissions can be reduced by 30% or more by including CCS in mitigation portfolios Power plants with CCS could emit 80-90% less CO 2 net Majority of CCS technologies either economically feasible under specific conditions or part of a mature market now Potential leakage very likely < 1% over 100 years likely <1% over 1,000 years Schwarze Pumpe & Sleipner Huge storage capacity for CO 2 in geological formations 5

6 Geological storage potential 6

7 CCS is essential to combating climate change Source: IEA, Energy Technology Perspectives (2008) It is not possible to halve CO 2 emissions by 2050 without CCS (p.88) Climate mitigation costs are 71% greater without CCS - i.e. US$1.28 trillion more p.a. (p.90) The deployment of CCS should be a litmus test for the seriousness of environmental negotiators dealing with the climate challenge. Executive Director IEA 7

8 Planned CCS Projects: Europe 28 potential projects 26 coal 2 gas 12 countries Most active in planning E.ON (4) Vattenfall (2) RWE (2) GassNova (2) List will change according to EU ETS changes 8

9 Global action on CCS $800m Fund 28 potential projects ETS Funding Stimulus Package incl. $ b on CCS 5 CCS power plants 9 GCCSI COAL21 GreenGen NZEC

10 Costs and benefits EUROPE Impact Assessment of the Geological Storage of CO2 (2008) USA Pew Centre on Global Climate Change (2008) 10 x 400 MW coal CCS power plants 9b Saves 60b by 2030 in abatement costs 30 x 400 MW coal CCS power plants $30.1b Saves $80-100b by 2030 in abatement costs Deutsche Bank AG (2007) estimates 100% Auctioning of EUAs beyond 2013 for the power sector alone could raise 24b annually PEW suggests this could be financed through a levy on coal fuelled power stations for 10 years of between $ $ kwh 10

11 Low carbon technologies: Comparative contribution to mitigation Source: IEA, Energy Technology Perspectives (2008) 11

12 Investments in low carbon technologies EUROPEAN LOW CARBON INVESTMENTS Lifetime cost to build and operate first commercial scale coal plants with CCS McKinsey estimates 5-13 billion Annual costs for EU to meet its renewables energy targets EC estimates billion per annum UK LOW CARBON INVESTMENTS Abatement costs in UK via coal CCS McKinsey estimates / tco2 abated for first CCS coal plants to (From 2020 costs should be / tco2 abated) Abatement costs in UK via renewable energies Ofgem estimates about / tco2 12

13 2020 CO 2 avoidance costs for power generation technologies from a macroeconomic perspective in EUR/t of CO Lignite CCS Braunkohle CCS Biomasse (solid) (fest) Hard CCS coal Steinkohle CCS Biomasse (gasförmig) (gaseous) Wind Onshore onshore CCS Natural Erdgas CCS Wind Offshore offshore Photovoltaics Photovoltaik (open (Freifläche) space) Geothermie Geothermal energy Photovoltaik Photovoltaics (Gebäude) (buildings) Source: McKinsey&Company, Costs and Potentials of Greenhouse Gas Abatement in Germany, energy sector perspective, Berlin in September 2007, pp. 48 and 55 13

14 Thank you It is not possible to halve CO2 emissions by 2050 without CCS. Mitigation costs are 71% greater without CCS ($1.28 trillion more per annum) The deployment of CCS should be a litmus test for the seriousness of environmental negotiators dealing with the climate challenge International Energy Agency 14